Mr Denham told an audience at the Local Government Association: 'Not talking about difficult issues is far more likely to allow the malign and the vicious to exploit [them] on a spurious claim of speaking up for ordinary people.'
He said: 'Your role as council leaders taking that debate forward will be crucial.'
Central government is setting up a community cohesion panel to advise ministers, and a community cohesion unit to work across Whitehall.
'Some of you will conclude that your existing policies and programmes are satisfactory but I suspect many will not,'
RECOMMENDATIONS FOR COMMUNITY COHESION
Draft guidance on community cohesion was published this week by the LGA, DTLR, the Home Office and the Commission for Racial Equality.
-- Clear leadership around zero tolerance of racism
--Appoint a member champion and senior officer to work on community cohesion
--Public statements of commitment to community relations
--Invite leaders of all communities and faiths, including white, to launch new projects
--Use school twinning, pre-school clubs and education exchanges to promote cross-cultural contact
--Develop quantitative and qualitative measures of cohesion.
The deadline for comments on the draft is 14 August. The guidance is available from the LGA on 0207 664 3000.